Silver Forecast - Bullish Pennant Pattern Developing
Commodities / Forecasts & Technical Analysis Oct 26, 2006 - 12:00 AM GMTBy: Nadeem_Walayat
Silver recently followed the other commodities lower, such as gold and crude oil. But unlike gold, the price pattern is much more bullish, and resembles the Bullish Pennant, which is an strong and explosive bull pattern.
Technical Analysis
1. Price Patterns & Support - The price pattern developing is the Bullish Pennant on break of the trendline at about 12.5, The pattern would target a move of the size of the pattern from the high of the pattern of about 5.50 so would target 18.00
2. MACD - (Bottom indicator) - The MACD has been unwinding its overbought state and is now ready to trigger a resumption of the bull market on a cross that is likely in the next 2 weeks.
3. Moving Averages - The 50 week average as consistently worked well as support and held the recent correction in check, also gives the market room to breath on the upside.
4. Trend lines - The trend lines offer support at 10.5 and resistance at 13.30, With the triggering trendlines from the recent lows and highs at 12.5 and 10.8
5. Time - The pattern is likely to be fulfilled within the next 2 or 3 weeks at most with an anticipated break to the upside.
Conclusion - Silver is targeting a resumption of the uptrend on a break above 12.50 to target 18, as long as the support at 10.5 holds. The pattern observed is likely to be fulfilled within 2 weeks, and 3 at the latest.
Buy Trigger - A break of $12.50
Target - First target $15, 2nd target $18.
Stop-Loss - Would be below the recent low, so $10.50.
Nadeem Walayat
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